EXHIBIT 1.2
FIRST FEDERAL BANCSHARES, INC.
(A DELAWARE CORPORATION)
2,242,500 Shares
(Anticipated Maximum)
Common Stock
Purchase Price: $10.00 Per Share
Agency Agreement
July ___, 2000
Friedman, Billings, ▇▇▇▇▇▇ & Co., Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
First Federal Bancshares, Inc., a Delaware corporation (the "Company"),
and First Federal Bank, F.S.B. a federal savings bank (the "Bank"), hereby
confirm their agreement with Friedman, Billings, ▇▇▇▇▇▇ & Co., Inc. ("FBR" or
the "Agent") with respect to the offer and sale by the Company of up to
2,242,500 shares of the Company's common stock (the "Common Stock"). The shares
of Common Stock to be sold by the Company in the Offering (as hereinafter
defined) are hereinafter called the "Securities."
The Securities are being offered in accordance with the plan of
conversion (the "Plan") adopted by the Board of Directors of the Bank pursuant
to which the Bank intends to convert from a federally chartered mutual savings
bank to a federally chartered stock savings bank and issue all of its stock to
the Company. Pursuant to the Plan, the Company is offering to certain of the
Bank's depositors and borrowers and its tax qualified employee benefit plans
(the "Employee Plans") rights to subscribe for the Securities in a subscription
offering (the "Subscription Offering"). To the extent Securities are not
subscribed for in the Subscription Offering, such Securities may be offered to
certain members of the general public in a community offering (the "Community
Offering," and together with the Subscription Offering, as each may be extended
or reopened from time to time, the "Subscription/Community Offering") to be
commenced concurrently with or immediately following the Subscription Offering.
It is currently anticipated
by the Bank and the Company that any Securities not subscribed for in the
Subscription/Community Offering will be offered, subject to Section 2 hereof, in
a syndicated community offering (the "Syndicated Community Offering"). The
Subscription/Community Offering and the Syndicated Community Offering are
hereinafter referred to collectively as the "Offering" and the conversion of the
Bank from mutual to stock form, the acquisition of all of the capital stock of
the Bank by the Company and the Offering are hereinafter referred to
collectively as the "Conversion." It is acknowledged that the number of
Securities to be sold in the Conversion may be increased or decreased as
described in the Prospectus (as hereinafter defined). If the number of
Securities is increased or decreased in accordance with the Plan, the term
"Securities" shall mean such greater or lesser number, where applicable.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form SB-2 (No. 333-36368), including a
related prospectus, for the registration of the Securities under the Securities
Act of 1933, as amended (the "1933 Act"), has filed such amendments thereto, if
any, and such amended prospectuses as may have been required to the date hereof
by the Commission in order to declare such registration statement effective, and
will file such additional amendments thereto and such amended prospectuses and
prospectus supplements as may hereafter be required. Such registration statement
(as amended to date, if applicable, and as from time to time amended or
supplemented hereafter) and the prospectus constituting a part thereof
(including in each case all documents incorporated or deemed to be incorporated
by reference therein and the information, if any, deemed to be part thereof
pursuant to the rules and regulations of the Commission under the 1933 Act, as
from time to time amended or supplemented pursuant to the 1933 Act or otherwise
(the "1933 Act Regulations")), are hereinafter referred to as the "Registration
Statement" and the "Prospectus," respectively, except that if any revised
prospectus shall be used by the Company in connection with the
Subscription/Community Offering or the Syndicated Community Offering which
differs from the Prospectus on file at the Commission at the time the
Registration Statement becomes effective (whether or not such revised prospectus
is required to be filed by the Company pursuant to Rule 424(b) of the 1933 Act
Regulations), the term "Prospectus" shall refer to such revised prospectus from
and after the time it is first provided to the Agent for such use.
Concurrently with the execution of this Agency Agreement ("Agreement"),
the Company is delivering to the Agent copies of the Prospectus of the Company
to be used in the Subscription/Community Offering. Such Prospectus contains
information with respect to the Bank, the Company, the Conversion and the Common
Stock.
Section 1. REPRESENTATIONS AND WARRANTIES. (a) The Company
and the Bank jointly and severally represent and warrant to the Agent as of the
date hereof as follows:
(i) The Registration Statement has been declared
effective by the Commission, no stop order has been issued with respect
thereto and no proceedings
therefor have been initiated or, to the knowledge of the Company and
the Bank, threatened by the Commission. At the time the Registration
Statement became effective and at the Closing Time referred to in
Section 2 hereof, the Registration Statement complied and will comply
in all material respects with the requirements of the 1933 Act and the
1933 Act Regulations and did not and will not contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading. The Prospectus, at the date hereof does not and at the
Closing Time referred to in Section 2 hereof will not, include an
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; PROVIDED,
HOWEVER, that the representations and warranties in this subsection
shall not apply to statements in or omissions from the Registration
Statement or Prospectus or the Plan made in reliance upon and in
conformity with information with respect to the Agent furnished to the
Company in writing by the Agent expressly for use in the Registration
Statement or Prospectus (the "Agent Information," which the Company and
the Bank acknowledge appears only in the cover page and the sections
captioned "Market for the Common Stock," "The Conversion--Syndicated
Community Offering," "The Conversion--Marketing and Underwriting
Arrangements" and "The Conversion--Description of Sales Activities" of
the Prospectus).
(ii) The Company has filed with the Department of the
Treasury, Office of Thrift Supervision (the "OTS") the Company's
application for approval of its acquisition of the Bank (the "Holding
Company Application") on Form H-(e)1-S promulgated under the savings
and loan holding company provisions of the Home Owners' Loan Act
("HOLA") and the regulations promulgated thereunder. The Company has
received written notice dated ______________, 2000 from the OTS of its
approval of the acquisition of the Bank, such approval remains in full
force and effect and no order has been issued by the OTS suspending or
revoking such approval and no proceedings therefor have been initiated
or, to the knowledge of the Company or the Bank, threatened by the OTS.
At the date of such approval, the Holding Company Application complied
in all material respects with the applicable provisions of HOLA and the
regulations promulgated thereunder.
(iii) Pursuant to the rules and regulations of the
OTS governing the conversion of federally chartered mutual savings
institutions to stock form (the "Conversion Regulations"), the Bank has
filed with the OTS an application for conversion on Form AC, and has
filed such amendments thereto and supplementary materials as may have
been required to the date hereof (such application, as amended to date,
if applicable, and as from time to time amended or supplemented
hereafter, is hereinafter referred to as the "Conversion Application"),
including copies of the Bank's Proxy Statement, dated ____________,
2000, relating to the Conversion (the "Proxy Statement"), and the
Prospectus. The OTS has, by letter dated ______________, 2000 (the "OTS
Approval
Letter"), approved the Conversion Application (which Application
includes the Plan), such approval remains in full force and effect and
no order has been issued by the OTS suspending or revoking such
approval and no proceedings therefor have been initiated or, to the
knowledge of the Company or the Bank, threatened by the OTS. At the
date of such approval, the Conversion Application complied in all
material respects with the applicable provisions of the Conversion
Regulations except for those provisions specifically waived by the OTS
in the OTS Approval Letter.
(iv) At the time of their use, the Proxy Statement
and any other proxy solicitation materials will comply in all material
respects with the applicable provisions of the Conversion Regulations
and will not contain an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading.
(v) The OTS has not, by order or otherwise, prevented
or suspended the use of the Prospectus or any supplemental sales
literature authorized by the Company or the Bank for use in connection
with the Offering.
(vi) At the Closing Time referred to in Section 2,
the Company and the Bank will have satisfied all conditions precedent
to the Conversion in accordance with the Plan, the applicable
Conversion Regulations and all other applicable laws, regulations,
decisions and orders, including all material terms, conditions,
requirements and conditions precedent to the Conversion imposed upon
the Company or the Bank by the OTS, the Federal Deposit Insurance
Corporation (the "FDIC"), or any other regulatory authority, other than
those which the regulatory authority permits to be completed after the
Conversion.
(vii) RP Financial, LC., which prepared the appraisal
of the Bank as part of the Conversion, has advised the Company in
writing that it is independent of the Company and the Bank, within the
meaning of the Conversion Regulations.
(viii) The accountants who certified the financial
statements and supporting schedules of the Bank included in the
Registration Statement have advised the Company in writing that they
are independent public accountants within the meaning of the Code of
Ethics of the American Institute of Certified Public Accountants, and
such accountants have advised the Company in writing that they are,
with respect to the Company and the Bank, independent certified public
accountants as required by the 1933 Act and the 1933 Act Regulations.
(ix) The consolidated financial statements of the
Bank and the related notes thereto included in the Registration
Statement and the Prospectus present fairly the financial position of
the Bank as of the dates indicated and the results of operations,
retained earnings and cash flows for the periods specified, and comply
as to form in all
material respects with the applicable accounting requirements of the
1933 Act Regulations and the Conversion Regulations; except as
otherwise stated in the Registration Statement, said consolidated
financial statements have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis; and the
supporting schedules and tables included in the Registration Statement
present fairly the information required to be stated therein. The
financial statements of the Company are not required to be included in
the Registration Statement and Prospectus under applicable accounting
requirements of the 1933 Act Regulations.
(x) The pro forma financial statements and other pro
forma information included in the Prospectus present fairly the
information shown therein, have been prepared in accordance with
generally accepted accounting principles and the Commission's rules and
guidelines with respect to pro forma financial statements and other pro
forma information, have been properly compiled on the pro forma basis
described therein, and, in the opinion of the Company, the assumptions
used in the preparation thereof are reasonable and the adjustments used
therein are appropriate under the circumstances.
(xi) Since the respective dates as of which
information is given in the Registration Statement and the Prospectus,
except as otherwise stated therein (A) there has been no material
adverse change in the financial condition, results of operations or
business affairs of the Company and the Bank considered as one
enterprise, whether or not arising in the ordinary course of business,
and (B) except for transactions specifically referred to or
contemplated in the Prospectus, there have been no transactions entered
into by the Company or the Bank, other than those in the ordinary
course of business, which are material with respect to the Company and
the Bank considered as one enterprise.
(xii) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws of
the State of Delaware with corporate power and authority to own, lease
and operate its properties and to conduct its business as described
in the Prospectus and to enter into and perform its obligations under
this Agreement; and the Company is duly qualified as a foreign
corporation to transact business in each jurisdiction in which such
qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the
failure to so qualify would not have a material adverse effect on the
financial condition, results of operations or business affairs of the
Company and the Bank considered as one enterprise.
(xiii) Upon consummation of the Conversion, the
authorized, issued and outstanding capital stock of the Company will be
within the range set forth in the Prospectus under "Capitalization"
(except for subsequent issuances, if any, pursuant to reservations,
agreements or employee benefit plans referred to in the Prospectus,
subject to compliance with all conditions imposed thereon by the OTS,
in an amount as described
in the Prospectus); except for shares issued in connection with the
initial capitalization of the Company, which shares shall be
canceled upon consummation of the Conversion, no shares of Common
Stock have been or will be issued and outstanding prior to the
Closing Time referred to in Section 2; at the time of Conversion,
the Securities will have been duly authorized for issuance and, when
issued and delivered by the Company pursuant to the Plan against
payment of the consideration calculated as set forth in the Plan,
will be duly and validly issued and fully paid and non-assessable;
the terms and provisions of the Common Stock and the capital stock
of the Company conform to all statements relating thereto contained
in the Prospectus; and the issuance of the Securities is not subject
to preemptive or other similar rights.
(xiv) The Bank, as of the date hereof, is a federally
chartered savings bank in mutual form and upon consummation of the
Conversion will be a federally chartered savings bank in stock form, in
both instances with full corporate power and authority to own, lease
and operate its properties and to conduct its business as described in
the Prospectus; the Company and the Bank have obtained all licenses,
permits and other governmental authorizations currently required for
the conduct of their respective businesses or required for the conduct
of their respective businesses as contemplated by the Holding Company
Application and the Conversion Application, except where the failure to
obtain such licenses, permits or other governmental authorizations
would not have a material adverse effect on the financial condition,
results of operations or business affairs of the Company and the Bank
considered as one enterprise; all such licenses, permits and other
governmental authorizations are in full force and effect and the
Company and the Bank are in all material respects in compliance
therewith; neither the Company nor the Bank has received notice of any
proceeding or action relating to the revocation or modification of any
such license, permit or other governmental authorization; and the Bank
is qualified, in all material respects, as a foreign corporation in any
jurisdiction in which qualification is necessary, except where the
failure to so qualify would not have a material adverse effect on the
financial condition, results of operations or business affairs of the
Company and the Bank considered as one enterprise.
(xv) The deposit accounts of the Bank are insured by
the FDIC and, upon consummation of the Conversion, the liquidation
account for the benefit of eligible account holders and supplemental
eligible account holders will be duly established in accordance with
the requirements of the Conversion Regulations.
(xvi) No shares of common stock of the Bank have been
or will be issued prior to the Closing Time referred to in Section 2;
and as of Closing Time referred to in Section 2, all of the issued and
outstanding capital stock of the Bank will be duly authorized, validly
issued and fully paid and nonassessable, and all such capital stock
will be owned beneficially and of record by the Company free and clear
of any mortgage, pledge, lien, encumbrance or claim.
(xvii) The Company and the Bank have taken all
corporate action necessary for them to execute, deliver and perform
this Agreement, and this Agreement has been duly executed and delivered
by, and is the valid and binding agreement of, the Company and the
Bank, enforceable in accordance with its terms, except as may be
limited by bankruptcy, insolvency or other laws affecting the
enforceability of the rights of creditors generally or the rights of
creditors of a federally insured depository institution and judicial
limitations on the right of specific performance and except as the
enforceability of indemnification and contribution provisions may be
limited by applicable securities and banking laws.
(xviii) Subsequent to the respective dates as of
which information is given in the Registration Statement and the
Prospectus and prior to the Closing Time, except as otherwise may be
specifically described, indicated or contemplated therein, neither the
Company nor the Bank will have (A) issued any securities or incurred
any material liability or obligation, direct or contingent, or borrowed
money, except borrowings in the ordinary course of business from the
same or similar sources and in similar amounts as indicated in the
Prospectus, or (B) entered into any transaction or series of
transactions which is material in light of the business of the Company
and the Bank, taken as a whole, excluding the origination of loans or
the purchase or sale of investment securities or mortgage-backed
securities in the ordinary course of business or otherwise as indicated
in the Prospectus.
(xix) No approval of any regulatory or supervisory or
other public authority is required in connection with the execution and
delivery of this Agreement or the issuance of the Securities, except
for the declaration of effectiveness of any required post-effective
amendment to the Registration Statement by the Commission and approval
thereof by the OTS, the issuance of the federal stock charter by the
OTS and as may be required under the securities laws of various
jurisdictions.
(xx) Neither the Company nor the Bank is in violation
of its certificate of incorporation or charter or bylaws, as the case
may be (and the Bank will not be in violation of its charter or bylaws
in stock form upon consummation of the Conversion); and neither the
Company nor the Bank is in default (nor has any event occurred which,
with notice or lapse of time or both, would constitute a default) in
the performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which the Company or the
Bank is a party or by which it or any of them may be bound, or to which
any of the property or assets of the Company or the Bank is subject,
except for such defaults that would not, individually or in the
aggregate, have a material adverse effect in the financial condition,
results of operations or business of the Company and the Bank
considered as one enterprise.
(xxi) The execution, delivery and performance of this
Agreement and the
consummation of the transactions contemplated herein do not and will
not conflict with or constitute a breach of, or default under, or
result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or the Bank pursuant to any
contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which the Company or the Bank is a party or by which it
or any of them may be bound, or to which any of the property or assets
of the Company or the Bank is subject, except for such defaults that
would not, individually or in the aggregate, have a material adverse
effect on the financial condition, results of operations or business
affairs of the Company and the Bank considered as one enterprise; nor
will such action result in any violation of the provisions of the
certificate of incorporation or charter, as the case may be, or bylaws
of the Company or the Bank; nor will such action result in any
violation, in any material respect, of any applicable law,
administrative regulation or administrative or court decree.
(xxii) No labor dispute with the employees of the
Company or the Bank exists or, to the knowledge of the Company or the
Bank, is imminent; and, to the knowledge of the Company, there is no
existing or imminent labor disturbance by the employees of any of its
principal suppliers or contractors.
(xxiii) The Company and the Bank have good and
marketable title to all properties and assets for which ownership is
material to the business of the Company or the Bank and to those
properties and assets described in the Prospectus as owned by them,
free and clear of all liens, charges, encumbrances or restrictions,
except such as are described in the Prospectus or are not material in
relation to the business of the Company and the Bank considered as one
enterprise; and all of the leases and subleases material to the
business of the Company or the Bank under which the Company or the Bank
hold properties, including those described in the Prospectus, are valid
and binding agreements of the Company and the Bank, enforceable in
accordance with their terms.
(xxiv) The Company and the Bank are not in violation
of any directive from the OTS or the FDIC to make any change in the
method of conducting their respective businesses; the Bank has
conducted and is conducting its business so as to comply in all
material respects with all applicable statutes, regulations and
administrative and court decrees (including, without limitation, all
regulations, decisions, directives and orders of the OTS or the FDIC).
(xxv) There is no action, suit or proceeding before
or by any court or governmental agency or body, domestic or foreign,
now pending, or, to the knowledge of the Company or the Bank,
threatened, against or affecting the Company or the Bank which is
required to be disclosed in the Registration Statement (other than as
disclosed therein), or which might result in any material adverse
change in the financial condition, results of operations or business
affairs of the Company and the Bank considered as one enterprise, or
which might materially and adversely affect the properties or assets
thereof
or which might materially and adversely affect the consummation of the
Conversion; all pending legal or governmental proceedings to which the
Company or the Bank is a party or of which any of their respective
property or assets is the subject which are not described in the
Registration Statement, including ordinary routine litigation
incidental to their businesses, are considered in the aggregate not
material; and there are no contracts or documents of the Company or the
Bank which are required to be described in or filed as exhibits to the
Registration Statement or the Conversion Application which have not
been so described or filed.
(xxvi) The Bank has obtained an opinion of its
counsel, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, with respect to the legality
of the Securities to be issued and the federal income tax consequences
of the Conversion, copies of which are filed as exhibits to the
Registration Statement; all material aspects of the aforesaid opinions
are accurately summarized in the Prospectus; the facts and
representations upon which such opinions are based are truthful,
accurate and complete in all material respects; and neither the Bank
nor the Company has taken any action inconsistent therewith.
(xxvii) The Company is not required to be registered
under the Investment Company Act of 1940, as amended.
(xxviii) All of the loans represented as assets on
the most recent financial statements or selected financial information
of the Bank included in the Prospectus meet, in all material respects,
or are exempt from all requirements of federal, state or local law
pertaining to lending, including without limitation truth in lending
(including the requirements of Regulations Z and 12 C.F.R. Part 226 and
Section 563.99), real estate settlement procedures, consumer credit
protection, equal credit opportunity and all disclosure laws applicable
to such loans.
(xxix) With the exception of the loan from the
Company to the Employee Stock Ownership Plan as described in the
Prospectus, to the knowledge of the Company and the Bank, none of the
Company, the Bank or employees of the Bank has made any payment of
funds of the Company or the Bank as a loan for the purchase of the
Common Stock or made any other payment of funds prohibited by law, and
no funds have been set aside to be used for any payment prohibited by
law.
(xxx) The Company and the Bank are in compliance in
all material respects with the applicable financial recordkeeping and
reporting requirements of the Currency and Foreign Transaction
Reporting Act of 1970, as amended, and the rules and regulations
thereunder.
(xxxi) The Company and the Bank and all properties
owned or operated by the Company or the Bank are in compliance in all
material respects with all Environmental Laws (as defined below). There
are no actions, suits or proceedings, or
demands, claims, notices or investigations (including, without
limitation, notices, demand letters or requests for information from
any environmental agency) instituted or pending, or to the knowledge of
the Company or the Bank, threatened, relating to the liability of any
property owned or operated by the Company or the Bank thereof, under
any Environmental Law. For purposes of this subsection, the term
"Environmental Law" means any federal, state, local or foreign law,
statute, ordinance, rule, regulation, code, license, permit,
authorization, approval, consent, order, judgment, decree, injunction
or agreement with any regulatory authority relating to (i) the
protection, preservation or restoration of the environment (including,
without limitation, air, water, vapor, surface water, groundwater,
drinking water supply, surface soil, subsurface soil, plant and animal
life or any other natural resource), and/or (ii) the use, storage,
recycling, treatment, generation, transportation, processing, handling,
labeling, production, release or disposal of any substance presently
listed, defined, designated or classified as hazardous, toxic,
radioactive or dangerous, or otherwise regulated, whether by type or by
quantity, including any material containing any such substance as a
component.
(xxxii) The Company and the Bank have filed all
federal income and state and local franchise tax returns required to be
filed and have made timely payments of all taxes shown as due and
payable in respect of such returns, and no deficiency has been asserted
with respect thereto by any taxing authority.
(xxxiii) The Company has received approval, subject
to regulatory approval to consummate the Offering and issuance, to have
the Common Stock quoted on the Nasdaq National Market effective as of
the Closing Time.
(b) Any certificate signed by any officer of the Company
or the Bank and delivered to the Agent or counsel for the Agent shall be deemed
a representation and warranty by the Company or the Bank to the Agent as to the
matters covered thereby.
Section 2. APPOINTMENT OF FBR; SALE AND DELIVERY OF THE
SECURITIES; CLOSING. On the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Company
hereby appoints FBR as its exclusive financial advisor and marketing agent to
consult with and advise the Company, and to assist the Company with the
solicitation of subscriptions and purchase orders for Securities, in connection
with the Company's sale of Common Stock in the Subscription/Community Offering
and the Syndicated Community Offering, and to participate in the Offering in the
areas of market making, research coverage and syndicate formation (if
necessary). On the basis of the representations and warranties herein contained,
and subject to the terms and conditions herein set forth, FBR hereby accepts
such appointment and agrees to consult with and advise the Company and the Bank
as to the matters set forth in the letter agreement dated ___________, 2000
between FBR and the Bank (the "Letter Agreement"), a copy of which is attached
hereto as Exhibit A, and to use its best efforts to assist the Company with the
solicitation of subscriptions and purchase orders for Securities in accordance
with this Agreement; PROVIDED, HOWEVER, that the Agent shall not be
obligated to take any action which is inconsistent with any applicable laws,
regulations, decisions or orders.
The appointment of the Agent hereunder shall terminate upon the earlier
to occur of (a) forty-five (45) days after the last day of the Subscription
Offering, unless the Company and the Agent agree in writing to extend such
period and the OTS agrees to extend the period of time in which the Securities
may be sold, or (b) the receipt and acceptance of subscriptions and purchase
orders for all of the Securities.
If any of the Securities remain available after the expiration of the
Subscription/Community Offering, the Agent will seek to form a syndicate of
registered broker/dealers ("Selected Dealers") to assist in the solicitation of
purchase orders of such Securities on a best efforts basis, subject to the terms
and conditions set forth in a selected dealers' agreement (the "Selected
Dealers' Agreement"), substantially in the form set forth in Exhibit B to this
Agreement.
In the event the Company is unable to sell at least a minimum of
1,657,500 shares of Common Stock, within the period herein provided, this
Agreement shall terminate and the Company shall refund to any persons who have
subscribed for any of the Securities the full amount which it may have received
from them, together with interest as provided in the Prospectus, and no party to
this Agreement shall have any obligation to the others hereunder, except for the
obligations of the Company and the Bank as set forth in Sections 4, 6 and 7
hereof and the obligations of the Agent as provided in Sections 6 and 7 hereof.
If at least 1,657,500 shares of Common Stock are sold, the Company
agrees to issue or have issued the Securities sold and to release for delivery
certificates for such Securities at the Closing Time against payment to the
Company by any means authorized by the Plan; provided, however, that no funds
shall be released to the Company until the conditions specified in Section 5
hereof shall have been complied with to the reasonable satisfaction of the Agent
and its counsel. The closing shall be held at the offices of ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇ LLP at 10:00 a.m., local time, or at such other place and time as shall
be agreed upon by the parties hereto, on a business day to be agreed upon by the
parties hereto (it being understood that such date shall not be more than ten
business days after termination of the Offering and receipt of all approvals
necessary to complete the Offering). The Company shall notify the Agent by
telephone, confirmed in writing, when funds shall have been received for all the
Securities. One or more certificates for Securities shall be delivered in such
denomination or denominations and registered in such name or names as FBR
requests. Notwithstanding the foregoing, certificates for Securities purchased
through Selected Dealers shall be made available to the Agent for inspection at
least 48 hours prior to the Closing Time at such office as the Agent shall
designate. The hour and date upon which the Company shall release for delivery
all of the Securities, in accordance with the terms hereof, is herein called the
"Closing Time."
The Company will pay any stock issue and transfer taxes which may be
payable with
respect to the sale of the Securities.
In addition to reimbursement of the expenses specified in Section 4
hereof, the Agent will receive the following compensation for its services
hereunder:
(a) A management fee in the amount of $50,000, of which
$25,000 has been paid and of which $25,000 will be paid upon OTS approval of the
Conversion Application (the "Management Fee"). Should the Conversion be
terminated for any reason not attributable to the action or inaction of the
Agent, the Agent shall have earned and be entitled to be paid fees accruing
through the date at which point the termination occurred, including any accrued
legal fees expended by the Agent.
(b) A marketing fee of 1.50% of the aggregate Purchase
Price of the Common Stock sold in the Subscription/Community Offering, excluding
those shares purchased by (i) Bank officers, directors or employees (or members
of their immediate families), or (ii) by any ESOP, tax-qualified or stock
compensation plans (except IRA's) or similar plan created by the Bank for some
or all of its directors or employees (the "Marketing Fee"). The Management Fee
of $50,000 will be subtracted from the Marketing Fee.
(c) To the extent that not all of the Securities are
subscribed for in the Subscription/Community Offering, the selected dealers
participating in the Syndicated Community Offering will receive a commission in
the Syndicated Community Offering in a maximum amount to be negotiated by the
Agent and the Company and the Bank which reflects market requirements at the
time of the allocation of the shares in the Syndicated Community Offering.
If this Agreement is terminated by the Agent in accordance with the
provisions of Section 9(a) hereof or the Conversion is terminated by the Company
or the Bank, no fee other than the Management Fee shall be payable by the
Company to FBR; PROVIDED, HOWEVER, the Company shall reimburse the Agent for all
of its reasonable out-of-pocket expenses incurred prior to termination,
including the reasonable fees and disbursements of counsel for the Agent in
accordance with the provisions of Section 4 hereof.
All fees payable to the Agent hereunder shall be payable in immediately
available funds at Closing Time, or upon the termination of this Agreement, as
the case may be.
Section 3. COVENANTS OF THE COMPANY. The Company and the Bank
covenant with the Agent as follows:
(a) The Company and the Bank will prepare and file such
amendments or supplements to the Registration Statement, the Prospectus, the
Conversion Application and the Proxy Statement as may hereafter be required by
the 1933 Act Regulations or the Conversion Regulations or as may hereafter be
reasonably requested by the Agent. The Company and the Bank will promptly file
the Prospectus and any supplemental sales literature with the OTS and, if
required, with the Commission. Following completion of the
Subscription/Community Offering, in the event of a Syndicated Community
Offering, the Company and the Bank will (i) promptly prepare and file with the
Commission a post-effective amendment to the Registration Statement relating to
the results of the Subscription/Community Offering, any additional information
with respect to the proposed plan of distribution and any revised pricing
information or (ii) if no such post-effective amendment is required, will file
with the Commission, if necessary as determined by counsel to the Company, a
prospectus or prospectus supplement containing information relating to the
results of the Subscription/Community Offering and pricing information pursuant
to Rule 424(c) of the 1933 Act Regulations, in either case in a form acceptable
to the Agent. The Company and the Bank will notify the Agent immediately, and
confirm the notice in writing, (i) of the effectiveness of any post-effective
amendment of the Registration Statement, the filing of any supplement to the
Prospectus and the filing of any amendment to the Conversion Application, (ii)
of the receipt of any comments from the OTS or the Commission with respect to
the transactions contemplated by this Agreement or the Plan, (iii) of any
request by the Commission or the OTS for any amendment to the Registration
Statement, the Conversion Application or the Holding Company Application or any
amendment or supplement to the Prospectus or for additional information, (iv) of
the issuance by the OTS of any order suspending the Offerings or the use of the
Prospectus or the initiation of any proceedings for that purpose, (v) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or the initiation of any proceedings for that purpose,
and (vi) of the receipt of any notice with respect to the suspension of any
qualification of the Securities for offering or sale in any jurisdiction. The
Company and the Bank will make every reasonable effort to prevent the issuance
of any stop order and, if any stop order is issued, to obtain the lifting
thereof at the earliest possible moment.
(b) The Company and the Bank will give the Agent notice
of its intention to file or prepare any amendment to the Conversion Application,
the Holding Company Application or the Registration Statement (including any
post-effective amendment) or any amendment or supplement to the Prospectus
(including any revised prospectus which the Company proposes for use in
connection with the Syndicated Community Offering of the Securities which
differs from the prospectus on file at the Commission at the time the
Registration Statement becomes effective, whether or not such revised prospectus
is required to be filed pursuant to Rule 424(b) of the 1933 Act Regulations),
will furnish the Agent with copies of any such amendment or supplement within a
reasonable amount of time prior to such proposed filing or use, as the case may
be, and will not file any such amendment or supplement or use any such
prospectus to
which the Agent or counsel for the Agent may reasonably object.
(c) The Company and the Bank will deliver to the Agent
one signed copy and as many conformed copies of the Conversion Application and
the Registration Statement as originally filed and of each amendment thereto
(including exhibits filed therewith) as the Agent may reasonably request, and
from time to time such number of copies of the Prospectus as the Agent may
reasonably request. The Company authorizes the Agent to use the Prospectus (as
amended or supplemented, if amended or supplemented) in any lawful manner
contemplated by the Plan in connection with the sales of the Securities by the
Agent.
(d) During the period when the Prospectus is required to
be delivered, the Company and the Bank will comply, at their own expense, with
all requirements imposed upon them by the OTS, by the applicable Conversion
Regulations, as from time to time in force, and by the 1933 Act, the 1933 Act
Regulations, the Securities Exchange Act of 1934, as amended (the "1934 Act"),
and the rules and regulations of the Commission promulgated thereunder,
including, without limitation, Regulation M under the 1934 Act, so far as
necessary to permit the continuance of sales or dealing in shares of Common
Stock during such period in accordance with the provisions hereof and the
Prospectus.
(e) If any event or circumstance shall occur as a result
of which it is necessary, in the reasonable opinion of counsel for the Agent, to
amend or supplement the Prospectus in order to make the Prospectus not
misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, the Company and the Bank will forthwith amend or
supplement the Prospectus (in form and substance satisfactory to counsel for the
Agent) so that, as so amended or supplemented, the Prospectus will not include
an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances existing at the time it is delivered to a purchaser, not
misleading, and the Company and the Bank will furnish to the Agent a reasonable
number of copies of such amendment or supplement. For the purpose of this
subsection, the Company and the Bank will each furnish such information with
respect to itself as the Agent may from time to time reasonably request.
(f) The Company and the Bank will take all necessary
actions, in cooperation with the Agent, and furnish to whomever the Agent may
direct, such information as may be required to qualify the Securities for
offering and sale by the Company or to exempt such shares from registration, or
to exempt the Company as a broker-dealer and its officers, directors and
employees as broker-dealers or agents under the applicable securities or blue
sky laws of such jurisdictions in which the Securities are required under the
Conversion Regulations to be sold or as the Agent and the Company and the Bank
may reasonably agree upon; provided, however, that the Company shall not be
required to qualify to do business in any jurisdiction in which it is not so
qualified.
(g) The Company will make generally available to its
security holders as soon
as practicable, but not later than 60 days after the close of the period covered
thereby, an earnings statement (in form complying with the provisions of Rule
158 of the 1933 Act Regulations) covering a twelve month period beginning not
later than the first day of the Company's fiscal quarter next following the
"effective date" (as defined in said Rule 158) of the Registration Statement.
(h) During the period during which the Company's Common
Stock is registered under the 1934 Act or for three years from the date hereof,
the Company will furnish to its stockholders as soon as practicable after the
end of each such fiscal year an annual report (including consolidated statements
of financial condition and consolidated statements of income, stockholders'
equity and cash flows, certified by independent public accountants). In
addition, such annual report shall be made public through the issuance of
appropriate press releases at the same time or prior to the time of the
furnishing thereof to stockholders of the Company.
(i) During the period ending on the third anniversary of
the expiration of the fiscal year during which the closing of the transactions
contemplated hereby occurs, the Company will furnish to the Agent (i) as soon as
available, a copy of each report or other document of the Company furnished
generally to stockholders of the Company or furnished to or filed with the
Commission under the 1934 Act or any national securities exchange or system on
which any class of securities of the Company is listed or quoted, and (ii) from
time to time, such other nonconfidential information concerning the Company as
the Agent may reasonably request.
(j) The Company and the Bank will conduct the Conversion
in all material respects in accordance with the Plan, the Conversion Regulations
(to the extent not waived by the provisions of the OTS Approval Letter) and all
other applicable regulations, decisions and orders, including all applicable
terms, requirements and conditions precedent to the Conversion imposed upon the
Company or the Bank by the OTS.
(k) The Company and the Bank will use the net proceeds
received by them from the sale of the Securities in the manner specified in the
Prospectus under "Use of Proceeds."
(l) The Company has filed a registration statement on
Form 8-A for the Common Stock under Section 12(g) of the 1934 Act and such
registration statement became effective with the effectiveness of the
Registration Statement. The Company will maintain the effectiveness of such
registration for not less than three years. The Company will file with the
Nasdaq Stock Market all documents and notices required by the Nasdaq Stock
Market of companies that have issued securities that are traded in the
over-the-counter market and quotations for which are reported by the Nasdaq
National Market.
(m) The Company and the Bank will take such actions and
furnish such information as are reasonably requested by the Agent in order for
the Agent to ensure compliance with the NASD's "Interpretation With Respect to
Free-Riding and Withholding."
(n) Other than in connection with any employee benefit
plan or arrangement described in the Prospectus, the Company will not, without
the prior written consent of the Agent, which consent shall not be unreasonably
withheld, sell or issue, contract to sell or otherwise dispose of, any shares of
Common Stock, or any securities convertible or exchangeable for shares of Common
Stock other than the Securities, for a period of 180 days following the Closing
Time.
(o) The Company and the Bank will comply with the
conditions imposed by or agreed to with the OTS in connection with its approval
of the Holding Company Application and the Conversion Application.
Section 4. PAYMENT OF EXPENSES. The Company and the Bank jointly
and severally agree to pay all expenses incident to the performance of their
obligations under this Agreement, including but not limited to (i) the cost of
obtaining all securities and bank regulatory approvals, (ii) the printing and
filing of the Registration Statement and the Conversion Application as
originally filed and of each amendment thereto, (iii) the preparation, issuance
and delivery of the certificates for the Securities to the purchasers in the
Offering, (iv) the fees and disbursements of the Company's and the Bank's
counsel, accountants, conversion agent, appraiser and other advisors, (v) the
qualification of the Securities under securities laws in accordance with the
provisions of Section 3(f) hereof, including filing fees and the fees and
disbursements of counsel in connection therewith and in connection with the
preparation of the Blue Sky Survey, (vi) the printing and delivery to the Agent
of copies of the Registration Statement as originally filed and of each
amendment thereto and the printing and delivery of the Prospectus and any
amendments or supplements thereto to the purchasers in the Offerings and the
Agent, (vii) the printing and delivery to the Agent of copies of a Blue Sky
Survey, and (viii) the fees and expenses incurred in connection with the listing
of the Common Stock on the Nasdaq National Market. In the event the Agent incurs
any such fees and expenses on behalf of the Bank or the Company, the Bank will
reimburse the Agent for such fees and expenses whether or not the Conversion is
consummated; PROVIDED, HOWEVER, that the Agent shall not incur any substantial
expenses on behalf of the Bank or the Company pursuant to this Section without
the prior approval of the Bank or the Company.
The Company and the Bank jointly and severally agree to pay certain
expenses incident to the performance of the Agent's obligations under this
Agreement, including (i) the filing fees paid or incurred by the Agent in
connection with all filings with the NASD, (ii) legal fees and expenses of the
Agent's counsel up to an aggregate of $45,000, and (iii) all reasonable out of
pocket expenses incurred by the Agent relating to the Offering, including,
without limitation, advertising, promotional, syndication and travel expenses
and fees, provided that should the expenses in this clause (iii) exceed $30,000,
the Company must approve such expenses above that amount for FBR to be
reimbursed. All fees and expenses to which the Agent is entitled to
reimbursement under this paragraph of this Section 4 shall be due and payable
upon receipt by the Company or the Bank of a written accounting therefor setting
forth in reasonable detail the
expenses incurred by the Agent.
Section 5. CONDITIONS OF AGENT'S OBLIGATIONS. The Company, the
Bank and the Agent agree that the issuance and the sale of Securities and all
obligations of the Agent hereunder are subject to the accuracy of the
representations and warranties of the Company and the Bank herein contained as
of the date hereof and the Closing Time, to the accuracy of the statements of
officers and directors of the Company and the Bank made pursuant to the
provisions hereof, to the performance by the Company and the Bank of their
obligations hereunder, and to the following further conditions:
(a) No stop order suspending the effectiveness of the
Registration Statement shall have been issued under the 1933 Act or proceedings
therefor initiated or threatened by the Commission, no order suspending the
Offering or authorization for final use of the Prospectus shall have been issued
or proceedings therefor initiated or threatened by the OTS and no order
suspending the sale of the Securities in any jurisdiction shall have been
issued.
(b) At Closing Time, the Agent shall have received:
(1) The favorable opinion, dated as of Closing Time,
of ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, counsel for the Company and the
Bank, in form and substance satisfactory to counsel for the Agent, to
the effect that:
(i) The Company has been duly incorporated
and is validly existing as a corporation in good standing
under the laws of the State of Delaware.
(ii) The Company has full corporate power
and authority to own, lease and operate its properties and to
conduct its business as described in the Registration
Statement and Prospectus and to enter into and perform its
obligations under this Agreement.
(iii) The Company is duly qualified as a
foreign corporation to transact business and is in good
standing in the State of Illinois and each jurisdiction in
which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business as
described in the Prospectus, except where the failure to so
qualify would not have a material adverse effect upon the
consolidated financial condition, results of operations or
business affairs of the Company and the Bank, taken as a
whole.
(iv) Upon consummation of the Conversion,
the authorized, issued and outstanding capital stock of the
Company will be within the range described in the Prospectus
and, except for shares issued upon incorporation of the
Company, which shares shall be canceled prior to or
concurrently with the Closing Time, no shares of Common Stock
have been issued and are outstanding
prior to the Closing Time.
(v) The Securities have been duly and
validly authorized for issuance and sale and, when issued and
delivered by the Company pursuant to the Plan against payment
of the consideration calculated as set forth in the Plan, will
be duly and validly issued and fully paid and non-assessable.
(vi) The issuance of the Securities is not
subject to preemptive or other similar rights arising by
operation of law or, to their knowledge, otherwise.
(vii) The Bank has been at all times since
the date hereof and prior to the Closing Time organized and
validly existing under the laws of the United States of
America as a federally chartered savings bank of mutual form,
and, at Closing Time, has become chartered and validly
existing under the laws of the United States of America as a
federally chartered savings bank in stock form, in both
instances with full corporate power and authority to own,
lease and operate its properties and to conduct its business
as described in the Registration Statement and the Prospectus;
and the Bank is duly qualified as a foreign corporation in
each jurisdiction in which such qualification is required
whether by reason of the ownership or leasing of property or
the conduct of business as described in the Prospectus, except
where the failure to so qualify would not have a material
adverse effect upon the financial condition, results of
operations or business affairs of the Bank.
(viii) The Bank is a member of the Federal
Home Loan Bank of Chicago and the deposit accounts of the Bank
are insured by the FDIC up to the applicable limits.
(ix) Upon consummation of the Conversion,
all of the issued and outstanding capital stock of the Bank
will be duly authorized and validly issued and fully paid and
nonassessable, and all such capital stock will be owned
beneficially and of record by the Company free and clear of
any security interest, mortgage, pledge, lien, encumbrance or
claim.
(x) The OTS has approved the Holding Company
Application and the Conversion Application and no action is
pending, or to such counsel's knowledge, threatened with
respect to the Holding Company Application or the Conversion
Application or the acquisition by the Company of all of the
Bank's issued and outstanding capital stock; the Holding
Company Application and the Conversion Application comply as
to form in all material respects with the applicable
requirements of the OTS (other than financial statements, the
notes thereto, and other tabular, financial, statistical and
appraisal data included therein,
as to which no opinion need be rendered) except as compliance
therewith is specifically waived by the provisions of the OTS
Approval Letter and include all documents required to be filed
as exhibits thereto; and the Company has been authorized by
the OTS to become a savings and loan holding company and to
own all of the issued and outstanding capital stock of the
Bank to be issued pursuant to the Plan.
(xi) The execution and delivery of this
Agreement and the consummation of the transactions
contemplated hereby have been duly and validly authorized by
all necessary corporate action on the part of each of the
Company and the Bank, and this Agreement constitutes the
legal, valid and binding agreement of each of the Company and
the Bank, enforceable in accordance with its terms, except as
rights to indemnity and contribution hereunder may be limited
under applicable law (it being understood that such counsel
may avail itself of customary exceptions concerning the effect
of bankruptcy, insolvency or similar laws and the availability
of equitable remedies); the execution and delivery of this
Agreement, the incurrence of the obligations herein set forth
and the consummation of the transactions contemplated herein
will not (1) result in any violation of the provisions of the
certificate of incorporation or charter, as the case may be,
or bylaws of the Company or the Bank, or (2) in any material
respect, conflict with or constitute a breach of, or default
under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the
Company or the Bank pursuant to any material contract,
indenture, mortgage, loan agreement, note, lease or other
instrument to which the Company or the Bank is a party or by
which any of them may be bound, or to which any of the
property or assets of the Company or the Bank is subject.
(xii) The Prospectus has been authorized by
the OTS for final use pursuant to the Conversion Regulations
and the OTS Approval Letter and no action is pending or, to
the best of such counsel's knowledge, is threatened, by the
OTS to revoke such authorization.
(xiii) The Registration Statement is
effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement has been issued
under the 1933 Act or proceedings therefor initiated or, to
the best of such counsel's knowledge threatened by the
Commission.
(xiv) No further approval, authorization,
consent or other order of any federal or State of Illinois
board or body is required in connection with the execution and
delivery of this Agreement, the issuance of the Securities and
the consummation of the Conversion, except as may be required
under the securities or Blue Sky laws of various
jurisdictions.
(xv) At the time the Registration Statement
became effective, the Registration Statement (other than the
financial statements and appraisal, financial and statistical
data included therein, as to which no opinion need be
rendered) complied as to form in all material respects with
the requirements of the 1933 Act, the 1933 Act Regulations and
the Conversion Regulations.
(xvi) The Common Stock conforms to the
description thereof contained in the Prospectus, and the form
of certificate used to evidence the Common Stock is in due and
proper form and complies with all applicable statutory
requirements.
(xvii) To the best knowledge of such
counsel, there are no legal or governmental proceedings
pending or threatened against or affecting the Company or the
Bank which are required to be disclosed in the Registration
Statement and Prospectus, other than those disclosed therein.
(xviii) The information in the Prospectus
under "First Federal Bancshares' Dividend Policy," "The
Conversion," "Regulation and Supervision," "Restrictions on
Acquisition of First Federal Bancshares and First Federal
Bank," "Description of First Federal Bancshares Stock," and
"Description of First Federal Bank Stock," to the extent that
it constitutes matters of law, summaries of legal matters,
documents or proceedings, or legal conclusions, has been
reviewed by them and is correct in all material respects.
(xix) To the best knowledge of such counsel,
there are no contracts, indentures, mortgages, loan
agreements, notes, leases or other instruments required to be
described or referred to in the Registration Statement or to
be filed as exhibits thereto other than those described or
referred to therein or filed as exhibits thereto, and the
descriptions thereof or references thereto are correct in all
material respects.
(xx) The Plan has been duly authorized by
the Board of Directors of the Company and the Board of
Directors of the Bank and, the OTS's approval of the Plan
remains in full force and effect; the Bank's charter has been
amended, effective upon consummation of the Conversion and the
filing of such amended charter with the OTS, to authorize the
issuance of permanent capital stock; the Company and the Bank
have conducted the Conversion in all material respects in
accordance with applicable requirements of the Conversion
Regulations (except to the extent the requirement to comply
therewith was waived specifically by the terms of the OTS
Approval Letter), the Plan and all other applicable
regulations, decisions and orders thereunder, including all
material applicable terms, conditions, requirements and
conditions precedent to the
Conversion imposed upon the Company or the Bank by the OTS and
no order has been issued by the OTS to suspend the Offering
and no action for such purpose has been instituted or, to the
best of such counsel's knowledge, threatened by the OTS; and
no person has sought to obtain review of the final action of
the OTS in approving the Conversion Application and the
Holding Company Application.
(xxi) The Company and the Bank have obtained
all licenses, permits and other governmental authorizations
currently required for the conduct of their respective
businesses as described in the Registration Statement and
Prospectus, and all such licenses, permits and other
governmental authorizations are in full force and effect, and
the Company and the Bank are in all material respects
complying therewith.
(xxii) Neither the Company nor the Bank is
in violation of its certificate of incorporation or charter,
as the case may be (and the Bank will not be in violation of
its charter in stock form upon consummation of the
Conversion); the Company and the Bank are not in default, in
any material respect (nor has any event occurred which, with
notice or lapse of time or both, would constitute a default),
in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture,
mortgage, loan agreement, note, lease or other instrument to
which the Company or the Bank is a party or by which the
Company or the Bank or any of their property may be bound.
(xxiii) The Company is not required to be
registered as an investment company under the Investment
Company Act of 1940.
(2) The favorable opinion, dated as of Closing Time,
of Vedder, Price, ▇▇▇▇▇▇▇ & Kammholz, counsel for the Agent, with
respect to the matters set forth in Sections 5(b)(l)(i), (iv), (v),
(vi) (solely as to preemptive rights arising by operation of law),
(xi), (xv) and (xvi), as they relate to the Agent, and such other
matters as the Agent may reasonably require.
(3) In giving their opinions required by subsections
(b)(1) and (b)(2), respectively, of this Section, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇ LLP and Vedder, Price, ▇▇▇▇▇▇▇ & Kammholz shall each
additionally state that nothing has come to their attention that would
lead them to believe that the Registration Statement (except for
financial statements, the notes thereto and other financial,
statistical and appraisal data included therein, as to which counsel
need make no statement), at the time it became effective, contained an
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading or that the Prospectus (except for financial
statements and schedules and other financial, statistical or appraisal
data included therein, as to which counsel need make no
statement), at the time the Registration Statement became effective or
at Closing Time, included an untrue statement of a material fact or
omitted to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading. In giving their opinions, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇ LLP and Vedder, Price, ▇▇▇▇▇▇▇ & Kammholz may rely as to
matters of fact on certificates of officers and directors of the
Company and the Bank and certificates of public officials and, as to
certain matters of Illinois law, including Sections 5(b)(1)(xxi) and
(xxii) hereof, upon the opinions of , which opinions shall be in form
and substance satisfactory to the Agent, and Vedder, Price, ▇▇▇▇▇▇▇ &
Kammholz may also rely on the opinions of ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
LLP.
(c) At Closing Time, there shall not have been, since the
date hereof or since the respective dates as of which information is given in
the Registration Statement and the Prospectus, any material adverse change in
the financial condition, results of operations or business affairs of the
Company and the Bank considered as one enterprise, whether or not arising in the
ordinary course of business, and the Agent shall have received a certificate of
the President and Chief Executive Officer of the Company and of the Bank and the
chief accounting officer of the Company and of the Bank, dated as of Closing
Time, to the effect that (i) there has been no such material adverse change,
(ii) there shall have been no material transaction entered into by the Company
or the Bank from the latest date as of which the financial condition of the
Company or the Bank is set forth in the Registration Statement and the
Prospectus other than transactions referred to or contemplated therein and
transactions in the ordinary cause of business, (iii) neither the Company nor
the Bank shall have received from the OTS any direction (oral or written) to
make any material change in the method of conducting its business with which it
has not complied (which direction, if any, shall have been disclosed to the
Agent) or which materially and adversely would affect the business, financial
condition or results of operations of the Company or the Bank, (iv) the
representations and warranties in Section 1 hereof are true and correct with the
same force and effect as though expressly made at and as of the Closing Time,
(v) the Company and the Bank have complied with all agreements and satisfied all
conditions on their part to be performed or satisfied at or prior to Closing
Time, (vi) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
initiated or threatened by the Commission and (vii) no order suspending the
Offerings or the authorization for final use of the Prospectus has been issued
and no proceedings for that purpose have been initiated or threatened by the OTS
and no person has sought to obtain regulatory or judicial review of the action
of the OTS in approving the Plan in accordance with the Conversion Regulations
or the OTS approval of the Holding Company Application.
(d) At the time of the execution of this Agreement, the
Agent shall have received from ▇▇▇▇▇, ▇▇▇▇▇▇ and Company LLP a letter dated such
date, in form and substance satisfactory to the Agent, to the effect that (i)
they are independent public accountants with respect to the Company and the Bank
within the meaning of Rule 101 of the Code of Ethics of the AICPA, the 1933 Act
and the 1933 Act Regulations and the applicable Regulations of the
OTS and the FDIC; (ii) it is their opinion that the consolidated financial
statements and supporting schedules included in the Registration Statement and
covered by their opinion therein comply as to form in all material respects with
the applicable accounting requirements of the 1933 Act and the 1933 Act
Regulations and the rules and regulations of the OTS, the FDIC and the
Commission; (iii) based upon limited procedures set forth in detail in such
letter, nothing has come to their attention which causes them to believe that
(A) the unaudited financial statements and supporting schedules of the Bank
included in the Registration Statement do not comply as to form in all material
respects with the applicable accounting requirements of the 1933 Act and the
1933 Act Regulations, applicable accounting requirements of the OTS, the FDIC
and the Commission and generally accepted accounting principles applied on a
basis substantially consistent with that of the audited financial statements
included in the Registration Statement and the Prospectus, (B) the unaudited
amounts of net interest income and net income set forth under "[Recent
Developments]" in the Prospectus were not determined on a basis substantially
consistent with that used in determining the corresponding amounts in the
audited financial statements included in the Registration Statement, (C) as of
the date of the most recent financial statements available prior to the date of
this Agreement, there has been any increase in the consolidated long-term or
short-term debt of the Bank or any decrease in consolidated total assets, the
allowance for loan losses, total deposits or net worth of the Bank, in each case
as compared with the amounts shown in the February 29, 2000 balance sheet
included in the Registration Statement or, (D) during the period from February
29, 2000 to the date of the most recent financial statements available prior to
the date of this Agreement, there were any decreases, as compared with the
corresponding period in the preceding year, in total interest income, net
interest income, net interest income after provision for loan losses, income
before income tax expense or net income of the Bank, except in all instances for
increases or decreases which the Registration Statement and the Prospectus
disclose have occurred or may occur; and (iv) in addition to the examination
referred to in their opinion and the limited procedures referred to in clause
(iii) above, they have carried out certain specified procedures, not
constituting an audit, with respect to certain amounts, percentages and
financial information which are included in the Registration Statement and
Prospectus and which are specified by the Agent, and have found such amounts,
percentages and financial information to be in agreement with the relevant
accounting, financial and other records of the Company and the Bank identified
in such letter.
(e) At Closing Time, the Agent shall have received from
▇▇▇▇▇, ▇▇▇▇▇▇ and Company LLP a letter, dated as of Closing Time, to the effect
that they reaffirm the statements made in the letter furnished pursuant to
subsection (d) of this Section, except that the specified date referred to shall
be a date not more than five days prior to Closing Time.
(f) At Closing Time, the Common Stock shall have been
approved for listing on the Nasdaq National Market upon notice of issuance.
(g) At Closing Time, the Bank shall have received a
letter from RP Financial, LC., dated as of the Closing Time, confirming its
appraisal.
(h) At Closing Time, counsel for the Agent shall have
been furnished with such documents and opinions as they may require for the
purpose of enabling them to pass upon the issuance and sale of the Securities
and related proceedings, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the conditions,
herein contained; and all proceedings taken by the Company in connection with
the issuance and sale of the Securities as herein contemplated shall be
satisfactory in form and substance to the Agent and counsel for the Agent.
(i) At any time prior to Closing Time, (i) there shall
not have occurred any material adverse change in the financial markets in the
United States or elsewhere or any outbreak of hostilities or escalation thereof
or other calamity or crisis the effect of which, in the judgment of the Agent,
are so material and adverse as to make it impracticable to market the Securities
or to enforce contracts, including subscriptions or orders, for the sale of the
Securities, and (ii) trading generally on either the American Stock Exchange or
the New York Stock Exchange shall not have been suspended, and minimum or
maximum prices for trading shall not have been fixed, or maximum ranges for
prices for securities have been required, by either of said Exchanges or by
order of the Commission or any other governmental authority, and a banking
moratorium shall not have been declared by Federal authorities.
Section 6. INDEMNIFICATION. (a) The Company and the Bank,
jointly and severally, agree to indemnify and hold harmless the Agent and its
affiliates (as defined in Rule 405 of the 1933 Act), and their respective
directors, officers, employees, agents and controlling persons as follows:
(i) from and against any and all losses, claims, damages and
liabilities (or actions, including shareholder actions, in respect thereof),
whatsoever, as incurred, related to or resulting from any action taken by the
Agent in connection with the Conversion where acting as agent of the Company or
the Bank as described in Section 2 hereof whether or not such indemnified party
is a party and whether or not such claim, action or proceeding is initiated or
brought by the Company or the Bank;
(ii) from and against any and all losses, claims, damages, and
liabilities and expenses whatsoever, as incurred, based upon or arising out of
any untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement (or any amendment thereto), or the omission or
alleged omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading or arising out of any
untrue statement or alleged untrue statement of a material fact contained in the
Prospectus (or any amendment or supplement thereto) or the omission or alleged
omission therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; and
(iii) from and against reasonable expenses, as incurred
(including, subject to Section 6(c) hereof, the fees and disbursements of one
firm of counsel chosen by the Agent),
reasonably incurred in investigating, preparing for or defending against any
litigation, or any investigation, proceeding or inquiry by any governmental
agency or body, commenced or threatened, or any claim whatsoever described in
clauses (i) or (ii) above, to the extent that any such expense is not paid under
(i) or (ii) above;
PROVIDED, HOWEVER, that the indemnity in this paragraph (a) (i) shall
not apply to any settlement by the Agent or any person entitled to
indemnification hereunder effected without the prior written consent of the
Company or the Bank (not to be unreasonably withheld), and (ii) shall not apply
to the extent that any loss, claim, damage or liability that arises out of any
untrue statement or alleged untrue statement of a material fact or omission or
alleged omission of a material fact required to be stated therein or necessary
to make not misleading any statements contained in the Registration Statement
(or any amendment thereto) or the Prospectus (or any amendment or supplement
thereto) made in reliance upon and in conformity with the Agent Information or
is found in a final non-appealable judgment by a court of competent jurisdiction
to have resulted directly from the Agent's willful misconduct or gross
negligence and (iii) shall not apply to any suit, action or proceeding initiated
by the Company or the Bank against the Agent to enforce the terms of this
Agreement.
(b) The Agent agrees to indemnify and hold harmless the
Company, the Bank, their directors, each of the Company's officers who signed
the Registration Statement, and each person, if any, who controls the Company
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act
against any and all loss, liability, claim, damage and expense described in the
indemnity contained in subsection (a) of this Section, as incurred, but only
with respect to untrue statements or omissions, or alleged untrue statements or
omissions, of a material fact made in the Registration Statement (or any
amendment or supplement thereto) in the Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with the Agent
Information as defined in Section 1(i); PROVIDED, HOWEVER, that the indemnity in
this paragraph (b) shall not apply to any settlement by any such party effected
without the prior written consent of the Agent (which will not be unreasonably
withheld).
(c) Each indemnified party shall give notice as promptly
as reasonably practicable to each indemnifying party of any action commenced
against it in respect of which indemnity may be sought hereunder, but failure to
so notify an indemnifying party shall not relieve such indemnifying party from
any liability which it may have otherwise than on account of this indemnity
agreement. An indemnifying party may participate at its own expense in the
defense of any such action. In no event shall the indemnifying parties be liable
for fees and expenses of more than one counsel (in addition to no more than one
local counsel in each separate jurisdiction in which any action or proceeding is
commenced) separate from their own counsel for all indemnified parties in
connection with any one action or separate but similar or related actions in the
same jurisdiction arising out of the same general allegations or circumstances.
(d) The Company and the Bank also agree that the Agent
shall not have any
liability (whether direct or indirect, in contract or tort or otherwise) to the
Bank, the Company, its security holders or the Bank's or the Company's creditors
relating to or arising out of the engagement of the Agent pursuant to, or the
performance by the Agent of the services contemplated by, this Agreement, except
to the extent that any loss, claim, damage or liability is found in a final
judgment by a court of competent jurisdiction to have resulted primarily from
the Agent's willful misconduct or gross negligence.
(e) In addition to, and without limiting, the provisions
of Section (6)(a)(iii) hereof, in the event that any Agent, its affiliates or
any of its directors, officers, employees, agents or controlling persons is
requested or required to appear as a witness or otherwise gives testimony in any
action, proceeding, investigation or inquiry brought by or on behalf of or
against the Company, the Bank, the Agent or any of their respective affiliates
or any participant in the transactions contemplated hereby in which the Agent or
such person or agent is not named as a defendant, the Company and the Bank
jointly and severally agree to promptly reimburse the Agent on a monthly basis
for all expenses incurred by it in connection with preparing or appearing as a
witness or otherwise giving testimony, including, without limitation, the
reasonable fees and disbursements of its legal counsel. In addition to any
reimbursed fees, expenses or costs outlined in this Section 6, the Agent shall
also receive from the Company and the Bank cash compensation of $1,000.00 per
person, per day, plus reasonable out-of-pocket expenses and costs should the
Agent be required to provide testimony in any formal or informal proceeding
regarding the Offering.
Section 7. CONTRIBUTION. In order to provide for just and
equitable contribution in circumstances in which the indemnity agreement
provided for in Section 6 hereof is for any reason held to be unenforceable by
the indemnified parties although applicable in accordance with its terms, the
Company, the Bank and the Agent shall contribute to the aggregate losses,
liabilities, claims, damages and expenses of the nature contemplated by said
indemnity agreement incurred by the Company or the Bank and the Agent, as
incurred, in such proportions (i) that the Agent is responsible for that portion
represented by the percentage that the maximum aggregate marketing fees
appearing on the cover page of the Prospectus bears to the maximum aggregate
gross proceeds appearing thereon and the Company and the Bank are jointly and
severally responsible for the balance or (ii) if, but only if, the allocation
provided for in clause (i) is for any reason held unenforceable, in such
proportion as is appropriate to reflect not only the relative benefits to the
Company and the Bank on the one hand and the Agent on the other, as reflected in
clause (i), but also the relative fault of the Company and the Bank on the one
hand and the Agent on the other, as well as any other relevant equitable
considerations; PROVIDED, HOWEVER, that no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the ▇▇▇▇ ▇▇▇) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section, each person, if any, who
controls the Agent within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act shall have the same rights to contribution as the Agent, and
each director of the Company and of the Bank, each officer of the Company who
signed the Registration Statement, and each person, if any, who controls the
Company or the Bank within the meaning of Section 15
of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to
contribution as the Company and the Bank. Notwithstanding anything to the
contrary set forth herein, to the extent permitted by applicable law, in no
event shall the Agent be required to contribute an aggregate amount in excess of
the aggregate Marketing Fees to which the Agent is entitled and actually paid
pursuant to this Agreement.
Section 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE
DELIVERY. All representations, warranties and agreements contained in this
Agreement, or contained in certificates of officers of the Company or the Bank
submitted pursuant hereto, shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of any Agent or controlling
person, or by or on behalf of the Company, and shall survive delivery of the
Securities.
Section 9. TERMINATION OF AGREEMENT. (a) The Agent may terminate
this Agreement, by notice to the Company and the Bank, at any time at or prior
to Closing Time (i) if there has been, since the date of this Agreement or since
the respective dates as of which information is given in the Registration
Statement, any material adverse change in the financial condition, results of
operations or business affairs of the Company or the Bank, or the Company and
the Bank considered as one enterprise, whether or not arising in the ordinary
course of business; (ii) if there has occurred any material adverse change in
the financial markets in the United States or elsewhere or any outbreak of
hostilities or escalation thereof or other calamity or crisis the effect of
which, in the judgment of the Agent, are so material and adverse as to make it
impracticable to market the Securities or to enforce contracts, including
subscriptions or orders, for the sale of the Securities; (iii) or if trading
generally on either the American Stock Exchange, the New York Stock Exchange, or
the Nasdaq Stock Market has been suspended, or minimum or maximum prices for
trading have been fixed, or maximum ranges for prices for securities have been
required, by either of said Exchanges or by order of the Commission or any other
governmental authority, or if a banking moratorium has been declared by either
Federal or Illinois authorities; (iv) if any condition specified in Section 5
shall not have been fulfilled when and as required to be fulfilled; (v) if there
shall have been such material adverse change in the condition or prospects of
the Company or the Bank or the prospective market for the Company's securities
which in the Agent's good faith opinion would make it inadvisable to proceed
with the offering, sale or delivery of the Securities; (vi) if in the Agent's
good faith opinion, the price for the Securities established by the Company is
not reasonable or equitable under then prevailing market conditions; or (vii) if
the Conversion is not consummated on or prior to December 31, 2000.
(b) If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof relating to the reimbursement of
expenses and except that the provisions of Sections 6 and 7 hereof shall survive
any termination of this Agreement.
Section 10. NOTICES. All notices and other communications
hereunder shall be in
writing and shall be deemed to have been duly given if mailed or transmitted by
any standard form of telecommunication. Notices to the Agent shall be directed
to the Agent at Potomac Tower, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, attention of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, with a copy to ▇▇▇▇▇▇
▇. ▇▇▇▇▇, ▇▇, Esq., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇;
notices to the Company and the Bank shall be directed to either of them at First
Federal Bank, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, attention of ▇▇▇▇▇ ▇.
▇▇▇▇▇▇, President, with a copy to ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq., ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇ LLP, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇.
Section 11. PARTIES. This Agreement shall inure to the benefit of
and be binding upon the Agent, the Company and the Bank and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Agent, the Company and the Bank and their respective successors and the
controlling persons and officers and directors referred to in Sections 6 and 7
and their heirs and legal representatives, any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provision herein or
therein contained. This Agreement and all conditions and provisions hereof and
thereof are intended to be for the sole and exclusive benefit of the Agent, the
Company and the Bank and their respective successors, and said controlling
persons and officers and directors and their heirs and legal representatives,
and for the benefit of no other person, firm or corporation.
Section 12. ENTIRE AGREEMENT; AMENDMENT. This Agreement
represents the entire understanding of the parties hereto with reference to the
transactions contemplated hereby and supersedes any and all other oral or
written agreements heretofore made. No waiver, amendment or other modification
of this Agreement shall be effective unless in writing and signed by the parties
hereto.
Section 13. GOVERNING LAW AND TIME. This Agreement shall be
governed by and construed in accordance with the laws of the State of Illinois
applicable to agreements made and to be performed in said State without regard
to the conflicts of laws provisions thereof. Unless otherwise noted, specified
times of day refer to Central time.
Section 14. SEVERABILITY. Any term or provision of this Agreement
which is invalid or unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement or affecting the validity or enforceability of
any of the terms or provisions of this Agreement in any other jurisdiction. If
any provision of this Agreement is so broad as to be unenforceable, the
provision shall be interpreted to be only so broad as is enforceable.
Section 15. HEADINGS. Sections headings are not to be considered
part of this Agreement, are for convenience and reference only, and are not to
be deemed to be full or accurate descriptions of the contents of any paragraph
or subparagraph.
Section 16. COUNTERPARTS. This Agreement may be executed in
separate counterparts, all of which together shall constitute one agreement.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between the Agent, the Company and the Bank in accordance with its terms.
Very truly yours,
FIRST FEDERAL BANCSHARES, INC.
By:
---------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
President and Chief Executive Officer
FIRST FEDERAL BANK, F.S.B.
By:
---------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
President
CONFIRMED AND ACCEPTED,
as of the date first above written:
FRIEDMAN, BILLINGS, ▇▇▇▇▇▇ & CO., INC.
By:
---------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Managing Director
EXHIBIT A
LETTER AGREEMENT BETWEEN
FRIEDMAN, BILLINGS, ▇▇▇▇▇▇ & CO., INC.
AND FIRST FEDERAL BANK, F.S.B.
EXHIBIT B
SELECTED DEALERS' AGREEMENT
FIRST FEDERAL BANCSHARES, INC.
Up to 2,242,500 Shares (Anticipated Maximum)
Form of Selected Dealers' Agreement
________________, 2000
Gentlemen:
We have agreed to assist First Federal Bancshares, Inc. (the
"Company"), a Delaware corporation, and First Federal Bank, F.S.B. (the "Bank"),
a federally chartered mutual savings bank, in connection with the offer and sale
of up to 2,242,500 shares of the Company's common stock (the "Common Stock"), to
be issued in connection with the Plan (as defined herein). The total number of
shares of Common Stock to be offered may be decreased to a minimum of 1,657,500
shares, or increased to a maximum of 2,578,875 shares. The price per share has
been fixed at $10.00. The Common Stock, the number of shares to be issued, and
certain of the terms on which they are being offered, are more fully described
in the enclosed prospectus dated July ___, 2000 (the "Prospectus").
The Common Stock is being offered in accordance with the plan of
conversion (the "Plan") adopted by the Board of Directors of the Bank pursuant
to which the Bank intends to convert from a federally chartered mutual savings
bank to a federally chartered stock savings bank and issue all of its stock to
the Company. Pursuant to the Plan, the Company is offering to certain of the
Bank's depositors and borrowers and its tax qualified employee benefit plans
rights to subscribe for the Common Stock in a subscription offering (the
"Subscription Offering"). To the extent Common Stock is not subscribed for in
the Subscription Offering, such Common Stock may be offered to certain members
of the general public, in a community offering (the "Community Offering," and
together with the Subscription Offering, as each may be extended or reopened
from time to time, the "Subscription/Community Offering") to be commenced
concurrently with the Subscription Offering. It is currently anticipated by the
Bank and the Company that any Common Stock not subscribed for in the
Subscription/Community Offering will be offered in a syndicated community
offering (the "Syndicated Community Offering"). The Subscription/Community
Offering and the Syndicated Community Offering are hereinafter referred to
collectively as the "Offering," and the conversion of the Bank from mutual to
stock form, the acquisition of all of the capital stock of the Bank by the
Company and the Offering are hereinafter referred to collectively as the
"Conversion." The Offering is further being conducted in accordance with the
regulations of the Office of Thrift Supervision and the Federal Deposit
Insurance Corporation subject to the restrictions contained in the Plan.
The Common Stock is being offered in the Syndicated Community Offering
by broker/dealers licensed by the National Association of Securities Dealers,
Inc. ("NASD") which have been approved by the Company ("Approved Brokers").
We are offering to selected dealers (of which you are one) the
opportunity to participate in the solicitation of offers to buy the Common Stock
in the Syndicated Community Offering and we will pay you a fee in the amount of
_________________ percent (___%) of the dollar amount of the Common Stock sold
on behalf of the Company by you, as evidenced by the authorized designation of
your firm on the order form or forms or summary record, in the event indications
of interest are solicited (the "Purchase Record") accompanying funds transmitted
for payment therefor to the special account established by the Company for the
purpose of holding such funds. It is understood, of course, that payment of your
fee will be made only out of compensation received by us for the Common Stock
sold on behalf of the Company by you, as evidenced in accordance with the
preceding sentence. As soon as practicable after the Closing Date of the
offering, we will remit to you, only out of our compensation as provided above,
the fees to which you are entitled hereunder.
Each order form for the purchase of Common Stock or the Purchase Record
MUST set forth the IDENTITY and ADDRESS of each person to whom the certificates
for such Common Stock should be issued and delivered. Such order form for the
Purchase Record should clearly identify your firm in order for you to receive
compensation. You shall instruct any subscriber who elects to send his order
form to you to make any accompanying check payable to "First Federal Bancshares,
Inc."
This offer is made subject to the terms and conditions herein set forth
and is made only to selected dealers who are members in good standing of the
NASD who are to comply with all applicable rules of the NASD, including, without
limitation, the NASD's Interpretation With Respect to Free-Riding and
Withholding and Section 24 of Article III of the NASD's Rules of Fair Practice.
Orders for Common Stock will be strictly subject to confirmation and
we, acting on behalf of the Company, reserve the right in our unfettered
discretion to reject any order in whole or in part, to accept or reject orders
in the order of their receipt or otherwise, and to allot. Neither you nor any
other person is authorized by the Company, or by us to give any information or
make any representations other than those contained in the Prospectus in
connection with the sale of any of the Common Stock. No selected dealer is
authorized to act as agent for us when soliciting offers to buy the Common Stock
from the public or otherwise. No selected dealer shall engage in any stabilizing
(as defined in Rule 10b-7 promulgated under the Securities Exchange Act of 1934)
with respect to the Company's Common Stock during the offering.
We and each selected dealer assisting in selling Common Stock pursuant
hereto agree to comply with the applicable requirements of the Securities
Exchange Act of 1934 and applicable state rules and regulations. Each
customer-carrying selected dealer that is not a $250,000 net capital reporting
broker/dealer agrees that it will not use a sweep arrangement and that it will
transmit all customer checks by noon of the next business day after receipt
thereof. In addition, we and each selected dealer confirm that the Securities
and Exchange Commission interprets
Rule 15c2-8 promulgated under the Securities Exchange Act of 1934 as requiring
that a Prospectus be supplied to each person who is expected to receive a
confirmation of sale 48 hours prior to delivery of such person's order form or
mailing of such confirmation in the event indications of interest are solicited.
We and each selected dealer further agree that to the extent that your
customers desire to pay for shares with funds held by or to be deposited with
us, in accordance with the interpretation of the Securities and Exchange
Commission of Rule 15c2-4 promulgated under the Securities Exchange Act of 1934,
either (a) upon receipt of an executed order form or direction to execute an
order form on behalf of a customer to forward the offering price of the Common
Stock ordered on or before twelve noon Central time of the next business day
following receipt or execution of an order form by us to the Company for deposit
in a segregated account or (b) to solicit indications of interest in which event
(i) we will subsequently contact any customer indicating interest to confirm the
interest and give instructions to execute and return an order form or to receive
authorization to execute the order form on the customer's behalf, (ii) we will
mail acknowledgments of receipt of orders to each customer confirming interest
on the business day following such conformation, (iii) we will debit accounts of
such customers on the third business day (the "debit date") following receipt of
the confirmation referred to in (i), and (iv) we will forward the completed
order forms together with such funds to the Company on or before twelve noon on
the next business day and each selected dealer acknowledges that if the
procedure in (b) is adopted, our customers' funds are not required to be in
their accounts until the debit date.
Unless earlier terminated by us, this Agreement shall terminate upon
the Closing Date of the Offering. We may terminate this Agreement or any
provisions hereof at any time by written or telegraphic notice to you. Of
course, our obligations hereunder are subject to the successful completion of
the Conversion.
You agree that at any time or times prior to the termination of this
Agreement you will, upon our request, report to us the number of shares of
Common Stock sold on behalf of the Company by you under this Agreement.
We shall have full authority to take such actions as we may deem
advisable in respect of all matters pertaining to the offering. We shall be
under no liability to you except for lack of good faith and for obligations
expressly assumed by us in this Agreement.
Upon application to us, we will inform you as to the states in which we
believe the Common Stock has been qualified for sale under, or are exempt from
the requirements of, the respective blue sky laws of such states, but we assume
no responsibility or obligation as to your rights to sell Common Stock in any
state.
Additional copies of the Prospectus and any supplements thereto will be
supplied in reasonable quantities upon request.
Any notice from us to you shall be deemed to have been duly given if
mailed, telephoned, or telegraphed to you at the address to which this Agreement
is mailed.
This Agreement shall be construed in accordance with the laws of the
State of Illinois.
Please confirm your agreement hereto by signing and returning the
confirmation accompanying this letter at once to us at Friedman, Billings,
▇▇▇▇▇▇ & Co., Inc., Potomac Tower, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇. The enclosed duplicate copy will evidence the
agreement between us.
FRIEDMAN, BILLINGS, ▇▇▇▇▇▇ & CO., INC.
By:
--------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Managing Director
CONFIRMED AS OF:
, 2000.
(Name of Dealer)
By:
Its:
